EXHIBIT 1.1
WEC Company
$130,000,000
12% Senior Notes due July 15, 2009
▇▇▇▇▇ Equipment Company
$51,927,000
51,927 Units
Consisting of
15% Senior Discount Debentures due 2011
and
.8745 Shares of Common Stock
PURCHASE AGREEMENT
------------------
July 23, 1999
Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇.▇. 10010-3629
Dear Sirs:
1. Introductory. WEC Company, a Delaware corporation ("WEC"), proposes,
subject to the terms and conditions stated herein, to issue and sell to Credit
Suisse First Boston Corporation (the "Purchaser") $130,000,000 principal amount
of its 12% Senior Notes due July 15, 2009 (the "Notes") to be issued under an
indenture, to be dated as of July 28, 1999 (the "Notes Indenture"), among WEC,
▇▇▇▇▇ Equipment Company, a Delaware corporation and parent of WEC ("▇▇▇▇▇" or
the "Parent Guarantor" and together with WEC, the "Issuers"), and United States
Trust Company of New York, as trustee (the "Notes Trustee"), which Notes will be
unconditionally guaranteed (the "Parent Guaranty") by ▇▇▇▇▇ and by each future
domestic subsidiary of WEC. ▇▇▇▇▇ proposes, subject to the terms and conditions
stated herein, to issue and sell the Purchaser 51,927 Units (the "Units"), each
Unit consisting of (i) one 15% Senior Discount Debenture due 2011 (the
"Debentures") with a principal amount at maturity of $1,000 to be issued under
an indenture, to be dated as of July 28, 1999 (the "Debenture Indenture"), with
a potential amount at maturity of $1,000 between ▇▇▇▇▇ and United States Trust
Company of Texas, N.A., as trustee (the "Debenture Trustee") and (ii) .8745
shares of common stock, $.01 par value per share (the "Common Stock") of ▇▇▇▇▇.
The shares of Common Stock to be issued as part of the Units are collectively
referred to as the "Shares" and the Notes, Units, Debentures and Shares are
collectively referred to as the "Securities." The
United States Securities Act of 1933, as amended, is herein referred to as the
"Securities Act." Pursuant to agreements dated as of July 1, 1999 and as of July
7, 1999 (the "Acquisition Agreements"), ▇▇▇▇▇ will purchase the common stock or
assets of Tru-Part Manufacturing Corporation and its principal operating
subsidiary, Tool & Implement Supply Company (collectively, "TISCO") and Central
Fabricators Inc. ("Central Fabricators") (collectively, the "Acquisitions").
Holders (including subsequent transferees) of the Notes and Debentures will
have the registration rights set forth in the Registration Rights Agreement (the
"Registration Rights Agreement"), among WEC, ▇▇▇▇▇ and the Purchaser, in
substantially the form of Exhibit A hereto. Pursuant to the Registration Rights
Agreement, the Issuers agree to file with the Securities and Exchange Commission
(the "Commission") under the circumstances set forth therein, (i) a registration
statement under the Securities Act (the "Notes Exchange Offer Registration
Statement") registering an issue of senior notes identical to the Notes (the
"Exchange Notes") to be offered in exchange for the Notes (the "Notes Exchange
Offer"), (ii) a registration statement under the Securities Act (the "Debentures
Exchange Offer Registration Statement") registering an issue of senior discount
debentures identical to the Debentures (the "Exchange Debentures") to be offered
in exchange for the Debentures (the "Debentures Exchange Offer") and (iii) under
the circumstances set forth therein, a registration statement pursuant to Rule
415 under the Securities Act (the "Shelf Registration Statement"). Holders of
the Shares will have certain registration rights pursuant to a Registration
Rights and Securityholders Agreement (the "Securityholders Agreement") among
▇▇▇▇▇, Madison Dearborn Partners, Inc. and the Purchaser. This Agreement, the
Notes Indenture, the Notes, the Parent Guaranty, the Debenture Indenture, the
Debentures, the Registration Rights Agreement, the Securityholders Agreement and
the Acquisition Agreements are sometimes referred to in this Agreement,
individually, as a "Transaction Document" and, collectively, as the "Transaction
Documents." The Acquisitions and the offering of the Notes and the Units (the
"Offerings") are sometimes referred to herein, individually, as a "Transaction"
and collectively, as the "Transactions."
WEC and ▇▇▇▇▇ each hereby agree with the Purchaser as follows:
2. Representations and Warranties of the Issuers. Each of WEC and ▇▇▇▇▇
represents and warrants to, and agrees with, the Purchaser that:
(a) A preliminary offering circular dated July 9, 1999, and an
offering circular dated July 23, 1999, relating to the Notes to be offered
by the Purchaser have been prepared by WEC, and a preliminary offering
circular dated July 19, 1999, and an offering circular to be dated July 26,
1999, relating to the Debentures to be offered by the Purchaser have been
prepared by ▇▇▇▇▇. Such preliminary offering circulars and offering
circulars, as supplemented as of the
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date of this Agreement, together with any other document approved by the
Issuers for use in connection with the contemplated resale of the
Securities are hereinafter collectively referred to as the "Offering
Circulars." On the date of this Agreement, the Offering Circulars do not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions from the
Offering Circulars based upon written information furnished to the Issuers
by the Purchaser specifically for use therein, it being understood and
agreed that the only such information is that described as such in Section
7(b) hereof.
(b) Each of WEC and ▇▇▇▇▇ has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Delaware, with the corporate power and authority to own its properties and
conduct its business as described in the Offering Circulars; and each of
WEC and ▇▇▇▇▇ is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification except
where the failure to qualify would not, (1) individually or in the
aggregate, have a material adverse effect on the conditions (financial or
other), business, properties or results of operations of the Issuers taken
as a whole (2) adversely affect the issuance, validity or enforceability of
the Securities, the Notes Indenture or the Debenture Indenture or (3)
adversely affect the consummation of any of the transactions contemplated
by the Agreement (each of (1), (2) and (3) above, a "Material Adverse
Effect").
(c) There are no subsidiaries of WEC; the only subsidiary of ▇▇▇▇▇ is
WEC.
(d) The Notes Indenture has been duly authorized by all necessary
corporate action of WEC and ▇▇▇▇▇; the Notes have been duly authorized by
all necessary corporate action of WEC; the Parent Guaranty and the
Debentures have been duly authorized by ▇▇▇▇▇ and when the Notes and the
Debentures are delivered and paid for pursuant to this Agreement and the
Notes Indenture or Debenture Indenture, as applicable, on the Closing Date
(as defined below), the Notes Indenture will have been duly executed and
delivered by WEC and ▇▇▇▇▇, the Debenture Indenture will have been duly
executed and delivered by ▇▇▇▇▇, such Notes will have been duly executed,
issued and delivered by WEC and will conform to the description thereof
contained in the Offering Circulars, such Debentures will have been duly
executed, issued and delivered by ▇▇▇▇▇ and will conform to the description
thereof contained in the Offering Circulars, the Notes Indenture and such
Notes will constitute valid and legally binding
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obligations of WEC and ▇▇▇▇▇ and the Debenture Indenture and Debentures
will constitute valid and legally binding obligations of ▇▇▇▇▇, in each
case enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles; when the Notes are delivered to and paid
for by the Purchaser in accordance with this Agreement, the Parent Guaranty
will constitute the valid and binding obligation of ▇▇▇▇▇ enforceable
against ▇▇▇▇▇ in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(e) The Exchange Notes have been duly authorized by all necessary
corporate action of WEC and, when issued, authenticated, and delivered in
accordance with the terms of the Notes Indenture, the Registration Rights
Agreement and the Notes Exchange Offer, will constitute valid and legally
binding obligations of WEC and ▇▇▇▇▇, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(f) The Exchange Debentures have been duly authorized by all necessary
corporate action of ▇▇▇▇▇ and, when issued, authenticated, and delivered in
accordance with the terms of the Debenture Indenture, the Registration
Rights Agreement and the Debentures Exchange Offer, will constitute valid
and legally binding obligations of ▇▇▇▇▇, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(g) The Shares and all other outstanding shares of capital stock of
▇▇▇▇▇ have been duly authorized; all outstanding shares of capital stock of
▇▇▇▇▇ and WEC are, and, when the Shares have been delivered and paid for in
accordance with this Agreement on the Closing Date, such Shares will have
been, validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Offering Circulars; and the
stockholders of ▇▇▇▇▇ have no preemptive rights with respect to the Shares;
and there are no restrictions on transfers of the Shares except as
described in the Offering Circulars.
(h) Except as disclosed or reflected in the Offering Circulars, there
are no contracts, agreements or understandings between WEC or ▇▇▇▇▇ and any
person that would give rise to a valid claim against WEC, ▇▇▇▇▇ or the
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Purchaser for a brokerage commission, finder's fee or other like payment in
connection with the Offerings.
(i) Except for the Registration Rights Agreement, the Securityholders
Agreement and as otherwise described in the Offering Circulars, there are
no contracts, agreements or understandings between WEC or ▇▇▇▇▇ and any
person granting such person the right to require WEC or ▇▇▇▇▇ to file a
registration statement under the Securities Act with respect to any
securities of WEC or ▇▇▇▇▇ owned or to be owned by such person or to
require WEC or ▇▇▇▇▇ to include such securities in any registration
statement registering any other securities of WEC or ▇▇▇▇▇ under the
Securities Act.
(j) Except for those which have already been obtained or would not have
a Material Adverse Effect, no consent, approval, authorization, or order
of, or filing with, any governmental agency or body or any court is
required for the consummation of the Transactions as contemplated by (i)
this Agreement in connection with the issuance and sale of the Securities
by the Issuers, or (ii) any other Transaction Documents in connection with
the consummation of the transactions contemplated therein.
(k) The execution, delivery and performance by WEC and ▇▇▇▇▇ of each of
the Transaction Documents (to the extent each is a party thereto) and
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, (i) any statute, any rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over WEC or ▇▇▇▇▇ or any of their properties, or (ii) any
agreement or instrument to which WEC or ▇▇▇▇▇ is a party or by which WEC or
▇▇▇▇▇ is bound or to which any of the properties of WEC or ▇▇▇▇▇ is subject
except for such breach, violation or default which would not have a
Material Adverse Effect, or (iii) the charter or by-laws of WEC or ▇▇▇▇▇
and the Issuers have full corporate power and authority to authorize, issue
and sell the Securities as contemplated by this Agreement.
(l) This Agreement has been duly authorized, executed and delivered by
WEC and ▇▇▇▇▇.
(m) The Registration Rights Agreement has been duly authorized,
executed and delivered by WEC and ▇▇▇▇▇ and the Registration Rights
Agreement conforms to the descriptions thereof contained in the Offering
Circular and the Registration Rights Agreement constitutes valid and
legally binding obligations of WEC and ▇▇▇▇▇, enforceable in accordance
with its respective terms, except that any rights to indemnity and
contribution may be limited by federal and state securities laws and public
policy considerations and
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subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(n) The Securityholders Agreement has been duly authorized, executed
and delivered ▇▇▇▇▇ and the Securityholders Agreement conforms to the
descriptions thereof contained in the Offering Circulars and the
Securityholders Agreement constitutes valid and legally binding obligations
of the ▇▇▇▇▇, enforceable in accordance with its respective terms, except
that any rights to indemnity and contribution may be limited by federal and
state securities laws and public policy considerations and subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(o) The Acquisition Agreements have been duly authorized, executed and
delivered by WEC, ▇▇▇▇▇ and their subsidiaries (to the extent each is a
party thereto) and the Acquisition Agreements conform or will conform to
the descriptions thereof contained in the Offering Circulars and the
Acquisition Agreements are or will constitute valid and legally binding
obligations of the Company and its subsidiaries (to the extent each is a
party thereto), enforceable in accordance with its respective terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(p) Except as disclosed in the Offering Circulars, each of WEC and
▇▇▇▇▇ have good and marketable title to all real properties and all other
properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and
except as disclosed in the Offering Circulars, WEC and ▇▇▇▇▇ hold any
leased real or personal property under valid and enforceable leases with no
exceptions that would materially interfere with the use made or to be made
thereof by them.
(q) WEC and ▇▇▇▇▇ possess all certificates, authorities or permits
issued by appropriate governmental agencies or bodies necessary to conduct
the business now operated by them and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to WEC or
▇▇▇▇▇, would individually or in the aggregate, have a Material Adverse
Effect.
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(r) Except as disclosed in the Offering Circulars, no labor strike,
slowdown, stoppage or dispute (except for routine disciplinary and
grievance matters) with the employees of WEC or ▇▇▇▇▇ exists or, to the
knowledge of WEC or ▇▇▇▇▇, is imminent, that would individually or in the
aggregate, have a Material Adverse Effect.
(s) WEC and ▇▇▇▇▇ own, possess, have the right to use, or can acquire
on reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual property rights")
used in the conduct of the business now operated by them, and have not
received any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if determined
adversely to WEC or ▇▇▇▇▇, would, individually or in the aggregate, have a
Material Adverse Effect.
(t) Except as disclosed in the Offering Circulars, neither WEC nor
▇▇▇▇▇ (i) is in violation of any statute, any rule, regulation, decision or
order of any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic substances
or relating to the protection or restoration of the environment or human
exposure to hazardous or toxic substances (collectively, "environmental
laws"), (ii) owns or operates any real property contaminated with any
substance that is subject to any environmen tal laws, (iii) is liable for
any off-site disposal or contamination pursuant to any environmental laws,
or (iv) is subject to any claim relating to any environmental laws, in each
case, which violation, contamination, liability or claim would individually
or in the aggregate have a Material Adverse Effect; and neither WEC nor
▇▇▇▇▇ is aware of any pending investigation which might lead to such a
claim.
(u) Except as disclosed in the Offering Circulars, there are no pending
actions, suits or proceedings against or affecting WEC or ▇▇▇▇▇ or any of
their respective properties that if determined adversely to WEC or ▇▇▇▇▇,
would individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of WEC or ▇▇▇▇▇ to
perform its obligations under any Transaction Document to which it is a
party, or which are otherwise material in the context of the sale of the
Securities and the consummation of the other Transactions; and no such
actions, suits or proceedings are threatened or, to WEC or ▇▇▇▇▇'
knowledge, contemplated.
(v) The financial statements included in the Offering Circulars present
fairly the financial position of the applicable Issuer and its consolidated
subsidiaries as of the dates shown and their results of operations and cash
flows for the periods shown, and such financial statements have been
prepared in
7
conformity with the generally accepted accounting principles in the United
States applied on a consistent basis; and the assumptions used in preparing
the pro forma financial statements included in the Offering Circulars
provide a reasonable basis for presenting the significant effects directly
attributable to the Offerings or events described therein, the related pro
forma adjustments give appropriate effect to those assumptions, and the pro
forma columns therein reflect the proper application of those adjustments
to the corresponding historical financial statement amounts.
(w) Except as disclosed in the Offering Circulars, since the date of
the latest audited financial statements included in the Offering Circulars,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of WEC
and ▇▇▇▇▇ taken as a whole, and, except as disclosed in or contemplated by
the Offering Circulars, there has been no dividend or distribution of any
kind declared, paid or made by ▇▇▇▇▇ on any class of its capital stock.
(x) Neither WEC nor ▇▇▇▇▇ is an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the United States Investment Company
Act of 1940, as amended (the "Investment Company Act"); and neither WEC nor
▇▇▇▇▇ is and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the
Offering Circulars and the consummation of the other Transactions, will not
be an "investment company" as defined in the Investment Company Act.
(y) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as any of the Securities are listed on
any national securities exchange registered under Section 6 of the United
States Securities Exchange Act of 1934, as amended (the "Exchange Act") or
quoted in a U.S. automated inter-dealer quotation system.
(z) The offer and sale of the Securities in the manner contemplated by
this Agreement will be exempt from the registration requirements of the
Securities Act by reason of Section 4(2) thereof and, in the case of the
Notes, Regulation S thereunder; and it is not necessary to qualify an
indenture in respect of the Notes or the Debentures under the United States
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
(aa) None of WEC, ▇▇▇▇▇ or any of their respective affiliates, nor any
person acting on its or their behalf (i) has, within the six-month period
prior to the date hereof, offered or sold in the United States or to any
U.S. person (as
8
such terms are defined in Regulation S under the Securities Act) any of the
Securities or any security of the same class or series as any of the
Securities or (ii) has offered or will offer or sell any of the Securities
(A) in the United States by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the Securities
Act or (B) with respect to any such securities sold in reliance on Rule 903
of Regulation S ("Regulation S") under the Securities Act, by means of any
directed selling efforts within the meaning of Rule 902(b) of Regulation S.
In the case of the Notes, WEC, ▇▇▇▇▇ and their respective affiliates and
any person acting on its or their behalf have complied and will comply with
the offering restrictions requirement of Regulation S. Neither of the
Issuers has entered and they will not enter into any contractual
arrangement with respect to the distribution of any of the Securities
except for this Agreement.
(ab) The statistical and market related data included in the Offering
Circulars are based on or derived from sources which the Issuers believe to
be reliable.
(ac) The Issuers have delivered to the Purchaser true, correct and
complete executed copies of the Acquisition Agreements, together with any
amendments thereto.
(ad) None of WEC, ▇▇▇▇▇ or any of their respective affiliates, nor any
person acting on its or their behalf has taken or will take any action that
might cause this Agreement or the sale of any of the Securities to violate,
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal
Reserve System, in each case as in effect on the date hereof, or as the
same may hereafter be in effect, on the Closing Date.
(ae) The proceeds to the Issuers from the Offerings will be used as
described in the Offering Circulars.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, WEC agrees to sell to the Purchaser, and
the Purchaser agrees to purchase from WEC, at a purchase price of 97% of the
principal amount thereof plus accrued interest from July 28, 1999 to the Closing
Date (as hereinafter defined), all of the Notes. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, ▇▇▇▇▇ agrees to sell to the Purchaser,
and the Purchaser agrees to purchase the Units from ▇▇▇▇▇, at an aggregate
purchase price of $24,187,746 plus accrued interest on the Debentures from July
28, 1999 to the Closing Date, all of the Units.
9
WEC will deliver against payment of the purchase price the Notes in the
form of one or more permanent global Notes in registered form without interest
coupons (the "Global Notes") deposited with the Notes Trustee as custodian for
The Depository Trust Company ("DTC") and registered in the name of Cede & Co.,
as nominee for DTC. ▇▇▇▇▇ will deliver against payment of the purchase price the
Units in the form of one or more permanent global Units (each of which will
consist of one or more global certificates for Debentures and Shares) in
registered from without interest coupons (the "Global Units" and together with
the Global Notes, the "Global Securities") deposited with the transfer agent for
the Units, as custodian for DTC and registered in the name of Cede & Co., as
nominee for DTC. Interests in any permanent Global Securities will be held only
in book-entry form through DTC, except in the limited circumstances described in
the Offering Circulars.
Payment for the Securities shall be made by the Purchaser in Federal (same
day) funds by official check or checks or wire transfer to an account at a bank
acceptable to the Purchaser drawn to the order of WEC or ▇▇▇▇▇ at the office of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇ at 10:00A.M., (New York time), on July 28, 1999, or at such other time not
later than seven full business days thereafter as the Purchaser and the Company
determine, such time being herein referred to as the "Closing Date," against
delivery to the Notes Trustee or transfer agent for Units, as applicable, as
custodian for DTC of Global Notes or Global Units representing all of the Notes
and Units, respectively. The Global Securities will be made available for
checking at the above office of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, at
least 24 hours prior to the Closing Date.
4. Representations by Purchaser; Resale by Purchaser.
(a) the Purchaser represents and warrants to WEC and ▇▇▇▇▇ that it is
an "accredited investor" within the meaning of Regulation D under the
Securities Act.
(b) the Purchaser acknowledges that the Securities have not been
registered under the Securities Act and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons
except pursuant to an exemption from the registration requirements of the
Securities Act or, in the case of the Notes, in accordance with Regulation
S. The Purchaser represents and agrees that it has offered and sold the
Securities, and will offer and sell the Securities only in accordance with
Rule 903 or Rule 144A under the Securities Act ("Rule 144A") or, in the
case of the Notes, Rule 903. Accordingly, neither the Purchaser nor its
affiliates, nor any persons acting on its or their behalf, have engaged or
will engage in any directed selling efforts with respect to the Securities,
and the Purchaser, its affiliates and all persons acting
10
on its or their behalf have complied and will comply with the offering
restrictions requirement of Regulation S and Rule 144A.
Terms used in this subsection (b) have the meanings given to them by
Regulation S.
(c) the Purchaser agrees that it and each of its affiliates have not
entered and will not enter into any contractual arrangement with respect to
the distribution of the Securities except with the prior written consent of
WEC with respect to the Notes or ▇▇▇▇▇ with respect to the Units.
(d) the Purchaser agrees that it and each of its affiliates will not
offer or sell the Securities in the United States by means of any form of
general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act, including, but not limited to (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio,
or (ii) any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising. The Purchaser agrees, with
respect to resales made in reliance on Rule 144A of any of the Securities,
to deliver either with the confirmation of such resale or otherwise prior
to settlement of such resale a notice to the effect that the resale of such
Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A.
(e) the Purchaser represents and agrees that (i) it has not offered or
sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in
the United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995; (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 with respect to anything done
by it in relation to the Notes in, from or otherwise involving the United
Kingdom; and (iii) it has only issued or passed on and will only issue or
pass on in the United Kingdom any document received by it in connection
with the issue of the Securities to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
5. Certain Agreements of WEC and ▇▇▇▇▇. WEC and ▇▇▇▇▇ each agrees with the
Purchaser that:
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(a) The Issuers will advise the Purchaser promptly of any proposal to
amend or supplement the Offering Circulars and will not effect such
amendment or supplementation without the Purchaser's consent. If, at any
time prior to the completion of the resale of the Securities by the
Purchaser, any event occurs as a result of which the Offering Circulars as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, the Issuers promptly will notify the Purchaser
of such event and promptly will prepare, at their own expense, an amendment
or supplement which will correct such statement or omission or effect such
compliance. Neither the Purchaser's consent to, nor the Purchaser's
delivery of, any such amendment or supplement shall constitute a waiver of
any of the conditions set forth in Section 6 hereof.
(b) The Issuers will furnish to the Purchaser copies of any
preliminary offering circular, the Offering Circulars and all amendments
and supplements to such documents, in each case as soon as available and in
such quantities as the Purchaser requests. At any time when the Issuers are
not subject to Section 13 or 15(d) of the Exchange Act, the Issuers will
promptly furnish or cause to be furnished to the Purchaser and, upon
request of holders and prospective purchasers of the Securities, to such
holders and purchasers, copies of the information required to be delivered
to holders and prospective purchasers of the Securities pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto) in
order to permit compliance with Rule 144A in connection with resales by
such holders of the Securities. The Issuers will pay the expenses of
printing and distributing to the Purchaser all such documents.
(c) The Issuers will arrange for the qualification of the Securities
for sale and the determination of their eligibility for investment under
the laws of such jurisdictions as the Purchaser reasonably designates and
will continue such qualifications in effect so long as required for the
resale of the Securities by the Purchaser.
(d) During the period of three years hereafter, WEC and ▇▇▇▇▇ will
furnish to the Purchaser, as soon as reasonably practicable after the end
of each fiscal year, a copy of its annual report to stockholders for such
year; and WEC and ▇▇▇▇▇ will furnish to the Purchaser, as soon as
available, (i) a copy of each report and any definitive proxy statement of
WEC and ▇▇▇▇▇ filed with the Commission under the Exchange Act, or mailed
to stockholders and (ii) from time to time, such other information
concerning WEC and ▇▇▇▇▇ as the Purchaser may reasonably request, subject
to the execution by Purchaser of a confidentiality agreement with respect
to such information if it is not otherwise
12
publicly available. Nothing in this clause (d) shall be interpreted as
requiring WEC and ▇▇▇▇▇ to prepare such materials if not otherwise required
to do so.
(e) During the period of two years after the Closing Date, the
Issuers will, upon request, furnish to the Purchaser and any holder of the
Securities a copy of the restrictions on transfer applicable to the
Securities.
(f) During the period of two years after the Closing Date, ▇▇▇▇▇ and
WEC will not, and will not permit any of their affiliates (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities that
have been reacquired by any of them.
(g) During the period of two years after the Closing Date, neither
WEC nor ▇▇▇▇▇ will be or become, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act.
(h) The Issuers will pay all expenses incidental to the performance
of their respective obligations under this Agreement and the Notes
Indenture or the Debenture Indenture, as the case may be, including (i) the
fees and reasonable expenses of the Notes Trustee or Debenture Trustee and
its professional advisers; (ii) all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the
Securities, the preparation and printing of this Agreement, the Notes
Indenture, the Debenture Indenture, the Securities, the Offering Circulars
and amendments and supplements thereto, and any other document relating to
the issuance, offer, sale and delivery of the Securities (provided such
documents are printed by a professional printer); (iii) the cost of
qualifying the Securities for trading in The Portal(SM) Market ("PORTAL")
and any expenses incidental thereto; (iv) the cost of any advertising
approved by the Issuers in connection with the issue of the Securities; (v)
for any expenses (including reasonable fees and disbursements of counsel)
incurred in connection with qualification of the Securities for sale under
the laws of such jurisdictions as the Purchaser designates and the printing
of memoranda relating thereto (not to exceed $10,000 in the aggregate);
(vi) for any fees charged by investment rating agencies for the rating of
the Securities; and (vii) for expenses incurred in distributing preliminary
offering circulars and the Offering Circulars (including any amendments and
supplements thereto) to the Purchaser. The Issuers will also pay or
reimburse the Purchaser (to the extent incurred) for all travel expenses of
the Issuers' officers and employees and any other expenses of the Issuers
in connection with attending or hosting meetings with prospective
purchasers of the Securities. Such amount may be deducted from the purchase
price for the Securities set forth in Section 3 hereof.
13
(i) In connection with the offering of the Securities, until the
Purchaser shall have notified the Issuers of the completion of the resale
of the Securities, none of ▇▇▇▇▇, WEC nor any of their affiliates has or
will, either alone or with one or more other persons, bid for or purchase
for any account in which it or any of its affiliates has a beneficial
interest any Securities or attempt to induce any person to purchase any
Securities; and neither it nor any of its affiliates will make bids or
purchases for the purpose of creating actual, or apparent, active trading
in, or of raising the price of, the Securities.
(j) For a period of 180 days after the date of the initial offering of
the Securities by the Purchaser, neither WEC nor ▇▇▇▇▇ will offer, sell,
contract to sell, announce their intention to sell, pledge or otherwise
dispose of, directly or indirectly, any United States dollar-denominated
debt securities issued or guaranteed by WEC or ▇▇▇▇▇ and having a maturity
of more than one year from the date of issue. Neither WEC nor ▇▇▇▇▇ will at
any time offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any securities under circumstances where such
offer, sale, pledge, contract or disposition would cause the exemption
afforded by Section 4(2) of the Securities Act or, in the case of the
Notes, the safe harbor of Regulation S thereunder to cease to be applicable
to the offer and sale of the Securities.
6. Conditions of the Obligation of the Purchaser. The obligation of the
Purchaser to purchase and pay for the Securities will be subject to the accuracy
of the representations and warranties on the part of WEC and ▇▇▇▇▇ herein, to
the accuracy of the statements of officers of WEC and ▇▇▇▇▇ made pursuant to the
provisions hereof, to the performance by WEC and ▇▇▇▇▇ of their respective
obligations hereunder and to the following additional conditions precedent:
(a) (I) the Purchaser shall have received a letter, dated the date of
this Agreement, of Ernst & Young LLP confirming that, with respect to WEC,
▇▇▇▇▇ and Central Fabricators, they are independent public accountants
within the meaning of the Securities Act and the applicable published rules
and regulations thereunder (the "Rules and Regulations") and stating:
(i) in their opinion the financial statements and schedules of
WEC, ▇▇▇▇▇ and Central Fabricators examined by them and included in
the Offering Circulars comply as to form with the applicable
accounting requirements of the Securities Act and the related
published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards
No. 71,
14
Interim Financial Information, on the unaudited financial statements
of WEC, ▇▇▇▇▇ and Central Fabricators included in the Offering
Circulars;
(iii) on the basis of the review referred to in clause (ii) above,
a reading of the latest available interim financial statements of WEC,
▇▇▇▇▇ and Central Fabricators, and of all subsidiaries of WEC, ▇▇▇▇▇
and Central Fabricators for which such interim financial statements
are provided, inquiries of officials of WEC, ▇▇▇▇▇ and Central
Fabricators, and of such subsidiaries, who have responsibility for
financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements of WEC, ▇▇▇▇▇ and
Central Fabricators included in the Offering Circulars do not
comply as to form with applicable accounting requirements of the
Securities Act and the related published Rules and Regulations or
any material modifications should be made to such unaudited
financial statements for them to be in conformity with generally
accepted accounting principles;
(B) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than
three business days prior to the date of this Agreement, there
was any change in the capital stock or any increase in long-term
debt of WEC, ▇▇▇▇▇ and Central Fabricators and their consolidated
subsidiaries or, at the date of the latest available balance
sheet read by such accoun tants, there was any decrease in
consolidated net assets, as compared with amounts shown on the
latest balance sheet included in the Offering Circulars; or
(C) for the period from the closing date of the latest income
statement of WEC, ▇▇▇▇▇ and Central Fabricators included in the
Offering Circulars to the closing date of the latest available
income statement of WEC, ▇▇▇▇▇ and Central Fabricators read by
such accountants there were any decreases, as compared with the
corresponding period of the previous year and with the period of
corresponding length ended the date of the latest income
statement of WEC, ▇▇▇▇▇ and Central Fabricators included in the
Offering Circular, in consolidated net sales or in the total
amounts of consolidated net income or in the ratio of earnings
to fixed charges;
15
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Offering Circulars disclose
have occurred or may occur or which are described in such letter;
(iv) they have performed the procedures specified therein on the
pro forma financial statements included in the Offering Circulars;
(v) on the basis of the review referred to in clause (iv) above,
nothing came to their attention that caused them to believe that the
pro forma financial statements included in or incorporated by
reference in the Offering Circulars do not comply as to form with the
applicable accounting requirements of the Act and the related
published Rules and Regulations or that the pro forma adjustments have
not been properly applied to the historical amounts in the compilation
of those statements; and
(vi) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information of
WEC, ▇▇▇▇▇ and Central Fabricators contained in the Offering Circulars
(in each case to the extent that such dollar amounts, percentages and
other financial information are derived from the general accounting
records of WEC, ▇▇▇▇▇ and Central Fabricators and their subsidiaries
subject to the internal controls of WEC's, ▇▇▇▇▇' or Central
Fabricators' accounting systems or are derived directly from such
records by analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such
letter.
(II) the Purchaser shall have received a letter, dated the date of
this Agreement, of ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP confirming that, with respect to
TISCO, they are independent public accountants within the meaning of the
Securities Act and the Rules and Regulations and stating to the effect
that:
(i) in their opinion the financial statements and schedules of
TISCO examined by them and included in the Offering Circulars comply
as to form with the applicable accounting requirements of the
Securities Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards
No. 71,
16
Interim Financial Information, on the unaudited financial statements
of TISCO included in the Offering Circulars;
(iii) on the basis of the review referred to in clause (ii) above,
a reading of the latest available interim financial statements of
▇▇▇▇▇, and of all subsidiaries of TISCO for which such interim
financial statements are provided, inquiries of officials of TISCO,
and of such subsidiaries, who have responsibility for financial and
accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) the unaudited financial statements of TISCO included in
the Offering Circulars do not comply as to form with the
applicable accounting requirements of the Securities Act and the
related published Rules and Regulations or any material
modifications should be made to such unaudited financial
statements for them to be in conformity with generally accepted
accounting principles;
(B) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than
three business days prior to the date of this Agreement, there
was any change in the capital stock or any material increase in
long-term debt of TISCO and its consolidated subsidiaries or, as
compared with amounts shown on the latest balance sheet included
in the Offering Circulars; or
(C) for the period from the closing date of the latest income
statement of TISCO included in the Offering Circulars to the
closing date of the latest available income statement of TISCO
read by such accountants there were any decreases, as compared
with the corresponding period of the previous year and with the
period of corresponding length ended the date of the latest
income statement of TISCO included in the Offering Circulars, in
consolidated net sales or in the total or per share amounts of
consolidated net income or in the ratio of earnings to fixed
charges;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Offering Circulars disclose
have occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
(including pro forma financial information and adjustments thereto) of
17
TISCO contained in the Offering Circulars (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of TISCO and its
subsidiaries subject to the internal controls of TISCO's accounting
system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
(III) the Purchaser shall have received a letter, dated the date of
this Agreement, of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc. confirming that, with
respect to Alitec, they are independent public accountants within the
meaning of the Securities Act and the Rules and Regulations and stating:
(i) in their opinion the financial statements and schedules of
Alitec examined by them and included in the Offering Circulars comply
as to form with the applicable accounting requirements of the
Securities Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on the unaudited
financial statements of Alitec included in the Offering Circulars;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of Alitec, and of all subsidiaries of Alitec for which such interim
financial statements are provided, inquiries of officials of Alitec,
and of such subsidiaries, who have responsibility for financial and
accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) the unaudited financial statements of Alitec included in
the Offering Circulars do not comply as to form with applicable
accounting requirements of the Securities Act and the related
published Rules and Regulations or any material modifications
should be made to such unaudited financial statements for them to
be in conformity with generally accepted accounting principles;
(B) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than
18
three business days prior to the date of this Agreement, there
was any change in the capital stock or any increase in long-term
debt of Alitec and its consolidated subsidiaries or, at the date
of the latest available balance sheet read by such accountants,
there was any decrease in consolidated net assets, as compared
with amounts shown on the latest balance sheet included in the
Offering Circulars; or
(C) for the period from the closing date of the latest
income statement of Alitec included in the Offering Circulars to
the closing date of the latest available income statement of
Alitec read by such accountants there were any decreases, as
compared with the corresponding period of the previous year and
with the period of corresponding length ended the date of the
latest income statement of Alitec included in the Offering
Circulars, in consolidated net sales or in the total amounts of
consolidated net income or in the ratio of earnings to fixed
charges;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Offering Circulars disclose
have occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
(including pro forma financial information and adjustments thereto) of
Alitec contained in the Offering Circulars (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of Alitec and its
subsidiaries subject to the internal controls of Alitec's accounting
system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
(b) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (A) a change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange
controls as would, in the judgement of the Purchaser, make it impractical
or inadvisable to proceed with the proposed issue, sale or distribution of
the Securities, whether in the primary market or in respect of dealings in
the secondary market, (B) any change, or any development or event involving
a prospective change, in the condition (financial or other), business,
properties or results of operations of
19
WEC and ▇▇▇▇▇ taken as a whole, which, in the judgment of the Purchaser, is
material and adverse to WEC and ▇▇▇▇▇ taken as a whole and makes it
impractical or inadvisable to proceed with completion of the offering or
the sale of and payment for the Securities; (C) any downgrading in the
rating of any debt securities of WEC or ▇▇▇▇▇ by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Securities Act), or any public announcement that any such
organization has under surveillance or review its rating in effect on the
date of this Agreement of any debt securities of WEC or ▇▇▇▇▇ (other than
an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (D) any material
suspension or material limitation of trading in securities generally on the
New York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of WEC or
▇▇▇▇▇ on any exchange or in the over-the-counter market; (E) any banking
moratorium declared by U.S. Federal or New York authorities; or (F) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment of the
Purchaser, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the offering or sale of and payment for the Securities.
(c) the Purchaser shall have received an opinion, dated such Closing
Date, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for WEC and ▇▇▇▇▇, that:
(i) Each of WEC and ▇▇▇▇▇ has been duly incorporated and is a
corporation existing and in good standing under the laws of the State
of Delaware. Each of WEC and ▇▇▇▇▇ is duly qualified to do business as
a foreign corporation in good standing in the jurisdictions indicated
in such opinion;
(ii) As of the date hereof, the authorized capital stock of
▇▇▇▇▇ consists of (A) 5,000,000 shares of Common Stock, par value
$0.01 per share, and (B) 600,000 shares of preferred stock consisting
of (x) 500,000 shares of undesignated, serial preferred stock, par
value $0.01 per share, and (y) 100,000 shares of 8% Cumulative
Redeemable Preferred Stock, par value $0.01 per share. As of the date
hereof, ▇▇▇▇▇ is the record holder of all of the outstanding shares of
capital stock of WEC and, to our knowledge, such shares are not
subject to any security interest, lien or encumbrance except as
described in the Offering Circulars. All outstanding shares of the
capital stock of WEC and ▇▇▇▇▇ have been duly authorized and are
validly issued, fully paid and nonassessable.
20
(iii) Each of WEC and ▇▇▇▇▇ has the corporate power and authority
to enter into and perform its obligations under the Transaction
Agreements to which it is a party, including, in the case of ▇▇▇▇▇,
the corporate power and authority to issue, sell and deliver the
Units, the Debentures and the Shares and to issue the Parent Guaranty
and, in the case of WEC, the corporate power and authority to issue,
sell and deliver the Notes, in each case as contemplated by this
Agreement. Each of ▇▇▇▇▇ and WEC has the corporate power and authority
to own their respective properties and conduct their respective
businesses as described in the Offering Circulars.
(iv) Except a described in the Offering Circulars, such counsel
has no knowledge of any contracts, agreements or understandings
between WEC or ▇▇▇▇▇ and any person granting such person the right to
require WEC or ▇▇▇▇▇ to file a registration statement under the
Securities Act with respect to any securities of WEC or ▇▇▇▇▇ owned or
to be owned by such person or to require WEC or ▇▇▇▇▇ to include such
securities in securities being registered pursuant to any other
registration statement filed by WEC or ▇▇▇▇▇ under the Securities Act;
(v) The Board of Directors of each of WEC and ▇▇▇▇▇ has adopted
by requisite vote the resolutions necessary to authorize the
execution, delivery and performance of each of this Agreement, the
Notes Indenture, the Debenture Indenture, the Registration Rights
Agreement, the Securityholders Agreement, the Notes, the Units, the
Debentures and the Parent Guaranty to the extent a party thereto. No
approval by the stockholders of WEC or ▇▇▇▇▇ is required. Each of WEC
and ▇▇▇▇▇ has duly executed and delivered such documents (to the
extent each is a party thereto); the Notes have been duly executed and
delivered by WEC and the Parent Guaranty has been duly executed and
delivered by ▇▇▇▇▇ and, when the Notes are duly and validly
authenticated in accordance with the terms of the Notes Indenture and
delivered against payment therefor in accordance with the terms of
this Agreement, the Notes will have been validly issued and will
constitute valid and binding obligations of WEC, enforceable against
WEC in accordance with its terms and entitled to the benefits of the
Notes Indenture, and the Parent Guaranty will have been validly issued
and will constitute the valid and binding obligation of ▇▇▇▇▇,
enforceable against ▇▇▇▇▇ in accordance with its terms and entitled to
the benefits of the Debenture Indenture; the Debentures have been duly
executed and delivered by ▇▇▇▇▇ and, when the Debentures are duly and
validly authenticated in accordance with the terms of the Debenture
Indenture and delivered against payment therefor in accordance with
the terms of this Agreement, the Debentures will have been validly
21
issued and will constitute valid and binding obligations of ▇▇▇▇▇,
enforceable against ▇▇▇▇▇ in accordance with its terms and entitled to
the benefits of the Debenture Indenture; each of the documents listed
above conforms to the description thereof contained in the Offering
Circulars; and each of such documents (other than this Agreement and
the Securities) constitutes valid and binding obligations of WEC and
▇▇▇▇▇ (to the extent each is a party thereto) enforceable in
accordance with its respective terms, subject in each case of
enforceability to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(vi) The board of directors of each of WEC and ▇▇▇▇▇ has
adopted by requisite vote the resolutions necessary to authorize the
execution, delivery and performance of, in the case of ▇▇▇▇▇, the
Exchange Debentures and, in the case of WEC, the Exchange Notes. No
approval by the stockholders of each of WEC or ▇▇▇▇▇ is required.
(vii) When the Exchange Notes have been duly and validly,
executed and delivered by WEC in accordance with the terms of the
Registration Rights Agreement, the Notes Exchange Offer and the Notes
Indenture, the Exchange Notes will constitute the valid and binding
obligations of WEC and ▇▇▇▇▇, entitled to the benefits of the
Indenture, and enforceable against WEC, in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting
creditors' rights and to general equity principles;
(viii) When the Exchange Debentures have been duly and validly
executed and delivered by ▇▇▇▇▇ in accordance with the terms of the
Registration Rights Agreement, the Debentures Exchange Offer and the
Debenture Indenture, the Exchange Debentures will constitute the valid
and binding obligations of ▇▇▇▇▇, entitled to the benefits of the
Debenture Indenture, and enforceable against ▇▇▇▇▇, in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting
creditors' rights and to general equity principles;
(ix) The Shares have been duly authorized and validly issued,
are fully paid and nonassessable and conform to the description
thereof contained in the Offering Circulars; the issuance of the
Shares will not be subject to any preemptive or similar rights;
22
(x) Neither WEC nor ▇▇▇▇▇ is and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Offering Circulars and the
consummation of the other Transactions (as defined below), will not be
an "investment company" as defined in the Investment Company Act;
(xi) Except for those which have already been obtained, no
consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required to be obtained or
made by WEC or ▇▇▇▇▇ for the consummation of the transactions
contemplated by this Agreement or the Transaction Documents or
otherwise in connection with the issuance and sale of the Securities,
except such as may be required under Securities Act, the Exchange Act
of Trust Indenture Act in connection with the Registration Rights
Agreement (with respect to which such counsel need express no
opinion);
(xii) The execution and delivery by WEC and ▇▇▇▇▇ (to the extent
each is a party thereto) of, and performance by such parties of their
respective obligations under, each of the Transaction Documents
(including the issuance and sale of the Securities) and compliance
with the terms and provisions thereof will not (a) violate the
certificate of incorporation or bylaws of WEC or ▇▇▇▇▇, (b) constitute
a violation by WEC or ▇▇▇▇▇ of any applicable law, statute or
regulation or governmental order, judgment or decree (except that any
rights to indemnity and contribution herein may be limited by federal
and state securities laws and public policy considerations), or (iii)
breach, or result in a default under, any material agreement or
instrument to which WEC or ▇▇▇▇▇ are a party or by which WEC or ▇▇▇▇▇
is bound, or to which any of the properties of WEC or ▇▇▇▇▇ is
subject, or the charter or by-laws of WEC or ▇▇▇▇▇, such material
agreements to be specified in such opinion;
(xiii) It is not necessary in connection with (i) the offer, sale
and delivery of the Securities by the Issuers to the Purchaser
pursuant to this Agreement or (ii) the resales of the Securities by
the Purchaser in the manner contemplated by this Agreement, to
register the Securities under the Securities Act or to qualify the
Notes Indenture or the Debenture Indenture under the Trust Indenture
Act;
(xiv) The statements made in the Offering Circulars under the
captions "Description of Other Financing Arrangements," "Description
of the Notes," "Description of Capital Stock," "Description of the
Units," "Description of the Debentures," "Certain Federal Income Tax
Considerations," and "United States Federal Income Tax Consequences,"
insofar as
23
they purport to describe the provisions of laws and documents referred
to therein, are correct in all material respects.
(xv) Neither the issuance or sale of the Securities under the
circumstances contemplated by this Agreement nor the use of proceeds
in the manner contemplated by the Offering Circulars under the caption
"Use of Proceeds" will contravene Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part
224) of the Board of Governors of the Federal Reserve System, in each
case as in effect on the date hereof, or as the same may hereafter be
in effect, on the Closing Date; and
(xvi) None of the Securities is of the same class (within the
meaning of Rule 144A under the Securities Act) as securities of WEC or
▇▇▇▇▇ that are listed on a national securities exchange registered
under Section 6 of the Exchange Act or that are quoted in a United
States automated inter-dealer quotation system.
(xvii) Such counsel shall state that no facts have come to such
counsel's attention in the course of participating with officers and
represen tatives of WEC and ▇▇▇▇▇ in the preparation of the Offering
Circulars (except for financial statements and schedules and other
financial data contained therein, as to which such counsel need
express no opinion) to lead it to believe that any part of the
Offering Circulars, as of the dates thereof or the Closing Date,
contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) The Purchaser shall have received from Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Purchaser, such opinion or opinions,
dated such Closing Date, with respect to the incorporation of WEC, ▇▇▇▇▇,
the validity of the Securities, the Offering Circulars, the exemption from
registration for the offer and sale of the Securities by the Issuers to the
Purchaser and the resales by the Purchaser as contemplated hereby and other
related matters as the Purchaser may require, and WEC and ▇▇▇▇▇ shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(e) The Purchaser shall have received a certificate, dated the Closing
Date, of the President or any Vice President and a principal financial or
accounting officer of each of WEC and ▇▇▇▇▇ in which such officers, to the
best of their knowledge after reasonable investigation, shall state that
the
24
representations and warranties of WEC and ▇▇▇▇▇ in this Agreement are
true and correct, that WEC and ▇▇▇▇▇ have complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, and that, subsequent to the date of the
most recent financial statements in the Offering Circulars, there has been
no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of WEC and ▇▇▇▇▇, taken as a
whole, except as set forth in or contemplated by the Offering Circular or
as described in such certificate.
(f) The Purchaser shall have received letters, dated the Closing
Date, of Ernst & Young LLP which meets the requirements of subsection
(a)(I) of this Section, of ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP which meets the requirements
of subsection (a)(II) of this Section and of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc.
which meets the requirements of subsection (a)(III) of this Section except
that, in each case, the specified date referred to in such subsections will
be a date not more than three business days prior to the Closing Date for
the purposes of this subsection.
(g) The Securities shall have been designated PORTAL securities in
accordance with the rules and regulations adopted by the NASD relating to
trading in PORTAL.
(h) On or prior to the Closing Date (i) each of the Transactions
shall have been consummated; (ii) the Transaction Documents shall continue
to be in full force and effect in accordance with the terms thereof; and
(iii) WEC or ▇▇▇▇▇ shall have provided to each of the Purchaser and counsel
to the Purchaser copies of all Transaction Documents delivered to the
parties relating to the Transactions (including but not limited to legal
opinions relating thereto).
(i) The issuance and sale of the Notes and the Units shall have been
consummated concurrently in accordance with the terms of this Agreement and
the description thereof in the Offering Circulars.
WEC or ▇▇▇▇▇ will furnish the Purchaser with such conformed copies of such
opinions, certificates, letters and documents as the Purchaser reasonably
requests. the Purchaser may in its sole discretion waive compliance with any
conditions to the obligations of the Purchaser hereunder.
7. Indemnification and Contribution. (a) WEC and ▇▇▇▇▇ will indemnify and
hold harmless the Purchaser, its directors and officers and each person, if any,
who controls the Purchaser within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which the Purchaser may become subject, under the Securities Act or the Exchange
Act or otherwise, insofar as
25
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Offering Circulars, or any amendment or
supplement thereto, or any related preliminary offering circular, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, including any
losses, claims, damages or liabilities arising out of or based upon the Issuers'
failure to perform its obligations under Section 5(a) of this Agreement, and
will reimburse the Purchaser for any legal or other expenses reasonably incurred
by the Purchaser in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
--------
however, that neither of WEC or ▇▇▇▇▇ will be liable in any such case to the
-------
extent that any such loss, claim, damage or liability (or actions in respect
thereof) arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to WEC or
▇▇▇▇▇ by the Purchaser specifically for use therein, it being understood and
agreed that the only such information consists of the information described as
such in subsection (b) below.
(b) the Purchaser will indemnify and hold harmless WEC and ▇▇▇▇▇,
their directors and officers and each person, if any, who controls WEC and ▇▇▇▇▇
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities to which WEC or ▇▇▇▇▇ may become subject, under
the Securities Act or the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Offering Circulars, or any amendment or supplement
thereto, or any related preliminary offering circular, or arise out of or are
based upon the omission or the alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to WEC or ▇▇▇▇▇ by the Purchaser
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by WEC or ▇▇▇▇▇ in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such information
furnished by the Purchaser consists of the following information in the Offering
Circular furnished on behalf of each Purchaser: the seventh and eighth
paragraphs under the caption "Plan of Distribution," provided, however, that the
-------- -------
Purchaser shall not be liable for any losses, claims, damages or liabilities
arising out of or based upon WEC's or ▇▇▇▇▇' failure to perform their
obligations under Section 5(a) of this Agreement.
26
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action and does not include a statement as
to or an admission of fault, culpability or failure to act by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by WEC and ▇▇▇▇▇ on the
one hand and the Purchaser on the other from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
WEC and ▇▇▇▇▇ on the one hand and the Purchaser on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by WEC and ▇▇▇▇▇ on the one hand and the Purchaser on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by WEC and ▇▇▇▇▇ bear to
the total discounts and commissions received by the Purchaser from WEC and ▇▇▇▇▇
under this Agreement. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by WEC or ▇▇▇▇▇ or the Purchaser and the parties'
27
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), the
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total price at which the Securities purchased by it were resold
exceeds the amount of any damages which the Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
(e) The obligations of WEC and ▇▇▇▇▇ under this Section shall be in
addition to any liability which WEC or ▇▇▇▇▇ may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
the Purchaser within the meaning of the Securities Act or the Exchange Act; and
the obligations of the Purchaser under this Section shall be in addition to any
liability which the Purchaser may otherwise have and shall extend, upon the same
terms and conditions to each person, if any, who controls WEC or ▇▇▇▇▇ within
the meaning of the Securities Act or the Exchange Act.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of WEC
and ▇▇▇▇▇ or their officers and of the Purchaser set forth in or made pursuant
to this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Purchaser, WEC, ▇▇▇▇▇, or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and payment
for the Securities. If this Agreement is terminated or if for any reason the
purchase of the Securities by the Purchaser is not consummated, the Issuers
shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 5 and the respective obligations of WEC, ▇▇▇▇▇ and the
Purchaser pursuant to Section 7 shall remain in effect. If the purchase of the
Securities by the Purchaser is not consummated other than solely because of the
occurrence of any event specified in clause (C), (D) or (E) of Section 6(b)(ii),
the Issuers will reimburse the Purchaser for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by it in
connection with the offering of the Securities.
9. Notices. All communications hereunder will be in writing and, if sent
to the Purchaser will be mailed, delivered or telegraphed and confirmed to the
Purchaser, at ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. 10010-3629, Attention:
Investment Banking Department - Transactions Advisory Group, or, if sent to WEC
or ▇▇▇▇▇, will
28
be mailed, delivered or telegraphed and confirmed to it at ▇▇▇▇▇ Equipment
Company, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chief Financial
Officer.
10. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the controlling
persons referred to in Section 7, and no other person will have any right or
obligation hereunder, except that holders of Securities shall be entitled to
enforce the agreements for their benefit contained in the second and third
sentences of Section 5(b) hereof against the Issuers as if such holders were
parties thereto.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
12. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
EACH OF WEC AND ▇▇▇▇▇ HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
THE FEDERAL AND STATE COURTS IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
29
If the foregoing is in accordance with the Purchaser's understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement among WEC, ▇▇▇▇▇ and the Purchaser
in accordance with its terms.
Very truly yours,
WEC COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Executive Officer
▇▇▇▇▇ EQUIPMENT COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Executive Officer
The foregoing Purchase Agreement is hereby confirmed and accepted as of the date
first above written.
Credit Suisse First Boston Corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
